Financial Literacy Exam 3 questions n
answers rated A+
Sources of personal loans include - ANS ✔✔commercial banks, savings institutions, finance
companies, and credit unions.
Loan agreements with family and friends should - ANS ✔✔be in writing and signed by all
parties.
The personal loan process involves - ANS ✔✔submitting the application, negotiating the loan
contract, and negotiating the interest rate.
In the loan application process, the information the borrowers must supply to the lenders is -
ANS ✔✔a personal balance sheet and a personal cash flow statement
From the personal cash flow statement, lenders can determine - ANS ✔✔if borrowers have
sufficient cash flow to cover their loan payments.
Collateral includes - ANS ✔✔assets used to back a loan in the event that the borrower defaults.
Loans backed by collateral are called: - ANS ✔✔secured loans
Interest rates are usually - ANS ✔✔lower on secured loans because the lender has less to lose in
the event the loan is not repaid
, Which of the following explains the difference between a 10% rate charged on a payday loan
and a 10% rate charged by a bank on a personal loan? - ANS ✔✔Personal loans are based on
APR standards and payday loans are not.
If you cosign a loan - ANS ✔✔you can be required to pay the balance of the loan not repaid by
the borrower.
If you fail to live up to your responsibilities as a cosigner, - ANS ✔✔it may restrict the amount
you can borrow.
The annual percentage rate (APR) measurement: - ANS ✔✔calculates both interest and other
fees on a loan on an annualized basis.
Could lenders with the same interest rate report different APRs? - ANS ✔✔Yes, depending on
the other fees charged.
Simple interest is - ANS ✔✔computed as a percentage of the existing loan amount.
Simple interest is measured using the principal - ANS ✔✔the interest rate applied to the
principal, and the loan's maturity.
What information is not contained in a loan repayment schedule? - ANS ✔✔A comparison of
your interest rate and the current interest rate
Loan payments under the simple interest method are usually lower than loan payments under
the add-on interest method because the: - ANS ✔✔interest is calculated on the remaining
balance.
The most important financial criteria that should be considered when buying a car is - ANS
✔✔the price is within your budget.
answers rated A+
Sources of personal loans include - ANS ✔✔commercial banks, savings institutions, finance
companies, and credit unions.
Loan agreements with family and friends should - ANS ✔✔be in writing and signed by all
parties.
The personal loan process involves - ANS ✔✔submitting the application, negotiating the loan
contract, and negotiating the interest rate.
In the loan application process, the information the borrowers must supply to the lenders is -
ANS ✔✔a personal balance sheet and a personal cash flow statement
From the personal cash flow statement, lenders can determine - ANS ✔✔if borrowers have
sufficient cash flow to cover their loan payments.
Collateral includes - ANS ✔✔assets used to back a loan in the event that the borrower defaults.
Loans backed by collateral are called: - ANS ✔✔secured loans
Interest rates are usually - ANS ✔✔lower on secured loans because the lender has less to lose in
the event the loan is not repaid
, Which of the following explains the difference between a 10% rate charged on a payday loan
and a 10% rate charged by a bank on a personal loan? - ANS ✔✔Personal loans are based on
APR standards and payday loans are not.
If you cosign a loan - ANS ✔✔you can be required to pay the balance of the loan not repaid by
the borrower.
If you fail to live up to your responsibilities as a cosigner, - ANS ✔✔it may restrict the amount
you can borrow.
The annual percentage rate (APR) measurement: - ANS ✔✔calculates both interest and other
fees on a loan on an annualized basis.
Could lenders with the same interest rate report different APRs? - ANS ✔✔Yes, depending on
the other fees charged.
Simple interest is - ANS ✔✔computed as a percentage of the existing loan amount.
Simple interest is measured using the principal - ANS ✔✔the interest rate applied to the
principal, and the loan's maturity.
What information is not contained in a loan repayment schedule? - ANS ✔✔A comparison of
your interest rate and the current interest rate
Loan payments under the simple interest method are usually lower than loan payments under
the add-on interest method because the: - ANS ✔✔interest is calculated on the remaining
balance.
The most important financial criteria that should be considered when buying a car is - ANS
✔✔the price is within your budget.
